Due diligence and warranty position

As part of your due diligence process, you should run the vendor company through the relevant company registration database, credit and AML screening. You should also ask questions to satisfy yourself if the ability and position of the provider to offer the product/services. Some products and services may offer a pay as you go service, this is worth considering if you are unsure of a longer-term commitment.

You should get a clear picture of the set up and ongoing costs ahead of any contract commitment. Make sure you consider these costs and any contract commitment for the service in detail and explore the scope for any negotiation.

Example questions

• Please confirm that you warrant the full capacity (staff, finance, technical skill, hardware etc) and all necessary consents and licenses to provide the stated service/product.
• Please confirm that you will remedy and/ or indemnify our firm/organisation for any failure arising from the preceding warranty.
• Please summarise all costs (excluding VAT) relating to the project. If costs are dependent on number of users or active users, please provide details.
• Please provide itemised costs i.e. costs that can be split into capital and recurrent for each year.
• Consultancy or services costed on a per day rate must be defined. Where a cost is fixed or variable this must be made clear.
• Please confirm that you are not subject to any insolvency or similar processes.
• Please confirm you have no material litigation pending (with a value specified).
• Please confirm that there are no reasons (e.g. project commitments) that the work cannot proceed immediately upon agreement to proceed.
• Please give indicative timetable from project start to launch.
• All costs must be listed upfront including initial set-up costs and subsequent years.
• Please confirm the length of contract you require us to commit to.
• Please provide a copy of the standard contract/terms and conditions to be provided.
• Is there a finance agreement needed, if so what are the exit conditions if the system isn’t satisfactory? What are the exit provisions and costs, in general?
• Please detail what input, resources and commitments you expect from us at each stage of the set up.
• How do we secure/retain our data in case your organisation ceases or changes hands?
• Do you offer a trial period?